Analysis of liquidity and profitability measures of Dell, Inc. The following data (amounts in millions) are taken from the February 3, 2006, and January 28, 2005, comparative financial statements of Dell, Inc., a direct marketer and distributor of personal computers (PCs) and PC-related products:

At January 30, 2004, total assets were $19,311 and total stockholders’ equity was $6,280.

a. Calculate Dell, Inc.’s working capital, current ratio, and acid-test ratio at February 3, 2006, and January 28, 2005. Round your ratio answers to two decimal places and your percentage answers to one decimal place.

b. Calculate Dell’s ROE for the years ended February 3, 2006, and January 28, 2005. Round your ratio answers to two decimal places, and your percentage answers to one decimal place.

c. Calculate Dell’s ROI, showing margin and turnover, for the years ended February 3, 2006, and January 28, 2005. Round your ratio answers to two decimal places and your percentage answers to one decimal place.

d. Evaluate the company’s overall liquidity and profitability.

e. Dell, Inc., did not declare or pay any dividends during the years ended February 3, 2006, or January 28, 2005. What do you suppose is the primary reason for this?
Optional continuation of Case 3.18—trend analysis The following historical data were derived from Dell, Inc.’s consolidated financial statements (in millions).

f. Are the trends expressed in these data generally consistent with each other?
g. In your opinion, which of these trends would be most meaningful to a potential investor in common stock of Dell, Inc.? Which trend would be least meaningful?
h. What other data (trend or otherwise) would you like to have access to before making an investment in Dell, Inc.?

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Net revenue. Cost of revenue. DELL INC. Consolidated Statements of Income Fiscal Year Ended February 3, January 28, 2006 2005 $55,908 $49,205 45,958 40,190 9,950 9,015 Gross margin. Operating expenses: Selling, general, and administrative 5,140 4,298 Research, development, and engineering.. 463 463 Total operating expenses. 5,603 4,761 Operating income... 4,347 4,254 Investment and other income, net 227 191 Income before income taxes 4,574 4,445 Income tax provision.. Net income 1,002 1,402 $ 3,572 $ 3,043